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Goff Speech to NZ India Business Council

Hon Phil Goff
Minister of Foreign Affairs and Trade
Speech Notes

30 November 2001 – delivered 1pm, Trade New Zealand, Auckland

Speech to NZ India Business Council

Thank you for the invitation to speak with you today.

As you are aware, I visited India back in March of this year. It was the first visit by a New Zealand Foreign Minister for India in over nine years. I believe the absence of contact at that level reflects a relationship which has been undervalued in the past. We are seeking to remedy that. Jim Sutton visited India last November on a trade visit. Paul Swain as Minister of Information Technology arrives in India today. I am pleased that he is to be joined by Paddy Marra, the Chairman of the India/New Zealand Business Council and other business representatives.

Our visits have been reciprocated by visits here over the last year by Murasoli Muran, Minister of Commerce and Industry, Minister of Food Processing Chaoba Singh, Minister of Information Technology Pramod Mahajan and External Affairs Minister Jaswant Singh.

There are many reasons why it is important to build a closer relationship.

India is the world’s largest democracy, with over 600 million voters.
We share a common commitment to democracy and human rights, reflected in close cooperation between our countries in response to last year’s coup in Fiji.
We both value our membership in the Commonwealth and work closely together in that forum.

Politically, New Zealand is now working much more closely with its Asian neighbours, putting emphasis for example on its participation in the annual Asean Regional Forum.
That coincides with India’s own “Look East” policy which gives higher priority to its Southeast Asian neighbourhood.

Nearly 40 percent of New Zealand’s trade is now with Asia.
Japan, China and Korea are our major trading partners.
Our trading relationship with India in the past has not reflected our closer historical relationship through the Commonwealth.
Trade was restricted by India’s decades of socialist economic development aimed at self-sufficiency. Trade barriers as well as tariffs were high.

However, the remarkable liberalisation of the Indian economy in the 1990s has provided a catalyst for a steady growth in two-way trade between our two countries which now amounts to more than $150 million (US) a year.
I expect that India will soon appear on our list of the Top Twenty destinations for New Zealand exports. And so it should as the world’s fourth largest economy.

New Zealand businesses, and New Zealanders generally, too often have an image of India as a poor country and therefore a limited market.
While it is certainly true that poverty remains a critical problem in India, with 300 million people living below the poverty line, it is equally true that there is a strong emerging market of 50 million middle and upper class consumers.
The India market is now at its most open for 50 years.
Although still subject to relatively high tariffs and sometimes difficult bureaucratic and business practices, since 1 April 2001 virtually any product can be freely imported into India.

People to people links are also becoming more and more important.
Last year India was the third largest source of permanent migrants to New Zealand. At its present rate of growth, the Indian population in New Zealand will soon reach 2 percent of our population.
In my own electorate of Mt Roskill, 20 percent of my constituents are Asian, many of them Indian. They work hard, value education, have strong family values and participate actively in the wider community.

We are becoming a prospective destination for Indian students seeking a high quality tertiary education overseas at a reasonable cost.
From a low base of only 241 Indian students at our tertiary institutions last year, the numbers this year grew six-fold to around 1500.

Tourist arrivals have also grown strongly, with a 70 percent increase in the year ended September to over 10,000 visitors.

With regard to business opportunities, there are five sectors which I believe provide particular opportunities.

Firstly, the food processing sector. New Zealand has developed advanced technology and know how that enables us to be a major and successful food exporter. The same technology could be used by India to improve both internal distribution and develop new food export industries. Companies such as Fletcher (Foods) are now working with Indian companies to provide turnkey solutions for processing of fresh fruit and vegetables.

Consultancy work is another important sector. New Zealand over the last twenty years has developed a significant skill base in areas such as roading, management of water and energy resources, public sector restructuring and tourism. All of New Zealand’s major consultancy companies are now active in India working in a range of sectors from improving India’s airspace management to assisting with upgrading India’s postal service.

A third area is forestry. India has a shortage of wood resources. Operating under the India Marketing Group, New Zealand’s major timber exporters have secured a valuable niche market in India. They account for 80-90 percent of India’s softwood imports. Timber exports to India this year are expected to be around 400,000 metric tonnes, from a zero base four years ago. Looking at future opportunities, New Zealand pine and associated technology combined with Indian capacity, could produce quality furniture and wood products for exports to other markets.

Information technology is a further area of opportunity. India has enormous capacity in terms of IT professional and skills. India is a world leader in IT. Its IT industry has grown at an average of 50 percent a year since 1991. Software exports were worth an estimated US $6.2 billion in 2000/2001. The industry has shown that freed from the shackles of government regulation, Indian knowledge and skills can compete with the best in the world. There are, I believe, synergies that exist between New Zealand and India. New Zealand has made a name for itself in the development of niche software and applications. Our sports broadcasting (in cricket and sailing) and weather forecasting software are examples of our capabilities in this sector. Six Indian IT firms have a presence in New Zealand and we are actively seeking to attract more IT capital and professionals to New Zealand.

Linked to our growing expertise in IT is New Zealand’s growing reputation in the feature film and documentary sector. This reputation has encouraged a number of Indian filmmakers to travel to New Zealand in increasing numbers, with New Zealand emerging as a backdrop for many Indian films. In the last three years 60 film crews have traveled to New Zealand to film. This is of course also a highly effective way of promoting New Zealand as a tourist destination.

If I could return briefly to my trip to India in March, I found it an extraordinary and valuable experience.

The first place I visited was the city of Bhuj in the state of Gujarat. I made the trip there because Gujarat was the state of origin of most of our traditional migrants from India and to demonstrate our concern at the devastating impact of the recent earthquake. Over 90 percent of the city had been destroyed including major infrastructure such as schools and hospitals. What I found remarkable amidst the devastation was the spirit and stoicism of people who were getting on with their lives.

New Zealand provided financial assistance for emergency relief and is now sharing its own earthquake technology with Indian engineers to ensure that major new buildings are effectively earthquake proofed.
I am pleased too that Fletchers are in the process of constructing demonstration kit-set homes for Gujarat.
Stripped back to the basics the wooden homes cost only $2,500, half the cost of the traditional ones being built by relief agencies.
If successful in overcoming traditional preferences for brick and block homes, the promotion of pine as a cheap and effective housing material would vastly boost our timber exports to the region.

As well as Gujarat, I also visited Mumbai and New Delhi.
In Mumbai, I addressed the Federation of Indian Chambers of Commerce and Industry and also met separately with Tata Consultancy Services, India’s largest IT company.
In Delhi, I inaugurated a Tourism New Zealand Roadshow and met with Jaswant Singh, George Fernandes, Opposition Leader Dr Manmohan Singh and gave an address at the Indian International Centre.

It was a very constructive visit, enabling us to build on the traditional links and historic goodwill between our two countries.
The challenge before us, both at the political level and in the business sector is to now realise the potential to move our relationship forward on both fronts.

Thank you.


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